Cash crunch affects food supply chain in Delhi-NCR

Wholesalers in Delhi-NCR mandis say that the supply of grains and vegetables has also been hit because transporters have not been able to pay truck drivers. In fact, the entire supply chain which includes from the main wholesaler at the top to the loader at the mandi at the bottom, have been hit due to lack of cash inflow.

People purchasing vegetables at the Khandsa road wholesale market.Traders, both retail and wholesale, in Delhi-NCR are feeling the pinch of Centre’s demonetisation move.(Parveen Kumar/Hindustan Times)

Ramesh Kumar, who sells vegetables on a cart in Kalkaji, has lost half of his daily business because he does not have money to buy adequate daily supplies and customers have ditched him for supermarkets where they can pay by card or mobile wallets.

In Gurgaon’s Sector 15, Mukesh Suthar’s roadside shop has a limited quantity of vegetables. Suthar says he used to buy at least five kilos of each vegetable daily. “Now, I can’t buy more than two kilos. I don’t have cash…can’t give change to my customers,” he said.

Shahzad Ali, a commission agent at the Navin Anaj Mandi in Ghaziabad, used to sell 200-300 quintals of rice daily. His current sales stand at 30-40 quintals.

Traders, both retail and wholesale, in Delhi-NCR are feeling the pinch of Centre’s demonetisation move. Though prices of essential commodities such as wheat, rice, pulses and vegetables have remained stable so far but traders warned that they may increase if the current situation continues to prevail.

Wholesalers in Delhi-NCR mandis say that the supply of grains and vegetables has also been hit because transporters have not been able to pay truck drivers. In fact, the entire supply chain which includes from the main wholesaler at the top to the loader at the mandi at the bottom, have been hit due to lack of cash inflow.

Azadpur Agricultural Produce Marketing Committee member Rajender Sharma said,“We are taking goods from farmers mostly on credit. The vendors and middlemen are also buying from us on credit. This has ensured that the supply we get is less and the quantity being sold is lesser. We can’t get a lot and also sell little, too, on credit. The situation won’t improve unless the currency chaos gets stabilised,” Sharma said.

At Khandsa Mandi, the largest wholesale fruit and vegetables market in Gurgaon, the number of trucks bringing onion have come down from 10 to four since last week. The supply of tomato has also been hit.

Inderjeet Thakran, president, Gurgaon sabzi mandi, said farmers have refused sell for lack of cash and it might lead to price rise. “We don’t have buyers even when the supply has reduced drastically,” he said. Vegetables were piling up at Khandsa Mandi on Wednesday as retailers did not turn up. “The supply has come down by half as trucks remain stranded in several parts of the country,” Thakran said.

Truck operators in Delhi-NCR said nearly half of their 4.5 lakh vehicles have come to a standstill. The All India Motor Transport Congress (AIMTC) said about two lakh trucks have not reached Delhi-NCR with supplies in last few days.

In some cases, traders are managing transactions through credit and receipts since Friday but non-payment of dues is having a cascading effect. The retailers are not paying wholesalers who are further not able to pay to suppliers and farmers. And, if perishable items like fruits and vegetables are not picked up by retailers, it would cause losses to wholesalers.

At Navin Anaj Mandi in Govindpuram, Ghaziabad, the inflow of supply trucks has gone down by at least 60%. “We are also not accepting old notes for ‘Mandi Shulk’ (2% market charge on trader’s sale) since November 8. Arrival has reduced to 30-40%. Some traders might be taking the old notes but the majority is accepting the other denomination,” said Rajesh Yadav, secretary, Mandi Samiti.

Farmers are also hit hard. A group of farmers said they are finding it difficult to arrange fertilizer even as the time is ripe to sow wheat.

“The shops and other markets where we go to purchase fertilizer are now demanding new notes. We have none left now. If in the next 10 days the fields are now provided fertilizer, wheat crop will be affected,” said Nooran, a farmer from Piplehda village in Masuri.

(Gulam Jeelani, Rashpal in Gurgaon, Peeyush Khandelwal in Ghaziabad and Ritam Halder in New Delhi)